Digital ‘No Sale’

When Internet start-ups are sued for copyright infringement, the complaints focus on piracy and services that make copyrighted books, music, and videos available for free. Not so in Capitol Records v. ReDigi, Inc. – the defendant, ReDigi, offered a service that allowed consumers to re-sell unwanted digital files.

In March, a Federal Court judge in New York ruled in Capitol’s favor and against ReDigi, even while news appeared that online retail giant Amazon has received a patent for a digital re-sale marketplace, with Apple filing a similar application. Clearly, there is growing interest in the question of “digital re-sale.” But here’s the catch – when it comes to digital, a “first sale” may not even be “a sale,” but a “license” instead.

“You can’t re-sell a license, you can’t transfer it to another person or child,” attorney Devereux Chatillon explains for CCC’s Chris Kenneally. “A license is an agreement that says, in part, ‘you can use and read this on your device, or on your computer, or on all of those, but you can only use it for personal use.’ and that will be part of all those obscure things that we all click through without reading.”

Even in any hypothetical re-sale, Chatillon notes, a physical copy and a digital copy are worlds apart. To begin with, unlike a paperback book, an MP3 file never wears out. “At least in theory, I can resell a digital copy of a song or of a book or of a movie an infinite number of times, and each one will be as good, indistinguishable from the new ‘copy’ – and I’m using air quotes here – put out by the studio, the record label, the musician, the author, or the publisher,” she points out.

Devereux Chatillon is a Transactional and IP Attorney. During her career, Dev Chatillon has worked in all facets of the media and entertainment industry, most recently as an executive with Callaway Digital Arts, a Kleiner Perkins backed start up making best-selling, award-winning apps directed at children for touchscreen devices. She has practiced extensively in copyright, beginning with serving as part of the representation in the U. S. Supreme court for The Nation in the landmark Harper & Row case, and continuing with ABC, The New Yorker, Miramax and Scholastic. She currently heads a solo legal practice focusing on the intersection of content and tech.